management, vol. 1, ijmfm issn: 2348 3954 paper... · stores, hypermarkets etc the indian...

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“FACTORS INFLUENCING THE CHOICE OF ORGANIZED RETAIL OUTLETS OF

THE CONSUMERS IN DELHI & NCR”

*Mohammad Wasiq

* Department of Business Administration, Al-Falah School of engineering

& Technology, Faridabad

Abstract

n present business scenario with stiff competition and survival risk, it is of vital importance for the retailers

to understand the consumers in greater depth. The understanding of consumer provides various insights in

the strategies formulation. The present research work on factors influencing the choice of organized retail

outlets of the consumers in Delhi & NCR reveals the factors which influence the consumers to change their

preference towards organized retailing. The objective of the study is formulated to analyse the most prioritized

attributes of organized formats which attracts the consumers towards organized retailers in Delhi & NCR. The

Stratified random sampling (Two stage sampling) was adapted in the study and the primary data is collected

through survey. Percentage analysis, Weighted Average method and ANOVA are used to interpret the findings. It is

found that the customers prefer organized retailers to unorganized retailers because of the store attributes such as

quality, Convenience, Variety, Consistency, Price, Hygiene etc offered by the former. Income of the customers had a

major influence on their choice of organized retail outlet especially when it comes to the availability of different

varieties of products and display of information in the store.

Keywords: Organized retail; Store Attributes; Store Image; Prioritized Attributes.

*Corresponding author:

* Mohammad Wasiq

Reference this paper as: Wasique.M, “factors influencing the choice of organized retail outlets of the

consumers in Delhi & NCR” International Journal of Marketing & Financial Management, Vol. 1, Issue

1, Dec-2013, pp 24-37

I

IJMFM International Journal of Marketing & Financial

Management, Vol. 1, Issue 1, December-2013

ISSN: 2348 –3954

Wasique.M, “Factors influencing the choice of organized retail outlets of the consumers in Delhi & NCR”

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INTRODUCTION

Over the last two decades fundamental changes have taken place in the way and structure of

retailing. Consumer lifestyles have also changed markedly. Despite some important studies of

gaining knowledge about new retail developments and consumers, I argue in this paper that there

is a critical need to gauge the factors which attracts consumers towards a particular store.

Retailing by its very nature, is a dynamic industry. Over the years, the increasing literacy in our

country and the exposure to developed nations by way of the overseas work experiences, the

consumer awareness has increased on the quality and the price of the products/services that is

expected. Today more and more consumers are vocal on the quality of the products/services that

they expect from the market. This awareness has made the consumer seek more and more

reliable sources for purchases and hence the logical shift to purchases from the organized retail

chains that has a corporate background and where the accountability is more pronounced. The

consumer also seeks to purchase from a place where his/her feedback is more valued.

The retail environment today is changing more rapidly than before. It is characterized by

intensifying competition and more sophisticated and demanding customers who have greater

expectations related to their consumption and shopping experiences. The physical environments

of retail stores and the attributes of the stores create a tangible representation or image of a store.

The attractive physical dimensions of the stores such as lighting, air- conditioning, washrooms,

store layout, aisle placement etc., contributes to the store„s personality which ultimately draws

the maximum number of customers in the current retail scenario.

The study of consumers helps firms and organizations improve their marketing strategies by

understanding issues such as how

alternatives (e.g., brands, products);

culture, family, signs, media);

International Journal of Marketing & Financial Management, Vol. 1, Issue 1, Dec-2013, pp 24-37

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and marketing outcome;

level of importance or interest that they entail for the consumer; and

more effectively reach the consumer.

Understanding these issues helps us adapt our strategies by taking the consumer into

consideration. For example, by understanding that a number of different messages compete for

our potential customers‟ attention, we learn that to be effective, advertisements must usually be

repeated extensively. We also learn that consumers will sometimes be persuaded more by logical

arguments, but at other times will be persuaded more by emotional or symbolic appeals. By

understanding the consumer, we will be able to make a more informed decision as to which

strategy to employ.

There are three fundamental patterns which a consumer can follow and they could be:

(I) Brand first, retail outlet second

(ii) Retail outlet first, brand second

(iii) Brand and retail outlet simultaneously.

Besides from the above stated facts the following factors are also very much important for

attracting, converting and retaining customers in a particular retail outlet. These factors are being

described below.

1. Availability of merchandise in the store

2. Product Quality

3. Product range (both product width and depth)

4. Promotional offers and frequency of schemes.

5. Services (pre, during and post purchase)

6. Pricing as a result of merchandise on offer

7. Ambience of the store


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1. REVIEW OF LITERATURE

Bashar, Abu (2012) explored that in an increasingly competitive market environment future

success for shopping centers will depend on effective management and marketing. Shoppers

have a good choice of centers, all of which can meet their needs at a practical level. Centres need

to develop a compelling personality and distinctive position, based on identification of particular

strengths within their marketing mix that will appeal to their chosen target market.

Hemraj Verma and Pankaj Madan2 (2011)in their study on the “Factors Analysing The Store

Attributes To Identify Key Components Of Store Image (A Study On Some Selected Apparel

Stores In India)” have attempted to find out the key factors that are perceived as important to

Indian consumer. As the Indian retail environment is going through a sea change due to the

introduction of new formats and opening up of retail industry, the investigators found the

imperative to analyse the importance of different store image perception attributes in the India

Context. The five factors extracted through Factor analysis are Store's Product and Operational

Quality, Store's Overall Visual Appeal, Customer Convenience, Perceived Price and Past

Satisfaction and Store's Promotional Effectiveness.

Mathew Joseph and Manisha Gupta4 (2008) in their study on ―Impact of organized retailing on

unorganized sector said that the Indian retail sector is booming and modernizing rapidly in line

with India„s economic growth. This study, the second undertaken by ICRIER on the retail

industry, attempts to rigorously analyse the impact of organized retailing on different segments

of the economy. With the increase in number of formats for shopping like malls, departmental

stores, hypermarkets etc the Indian consumer„s preferences are changing towards organized

retailing. One of the surprising findings of the study is that low-income consumers save more

than others through shopping at organized retail outlets.

Arpita Khare1 (2011) in his study on ―Mall shopping behaviour of Indian small town

consumers ―has carried out a research in small cities to understand the mall shopping behavior

of the people and specifically focused on exploring the differences across age and gender groups

with regard to the familiarity with the concept of malls and their exposure to the organized retail.


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ANOVA test was used for the analyses. The results showed that consumers„ gender and age play

an important role in determining their attitude towards shopping in malls.

S. Ramesh Kumar, et.al, (2011) in their study on ―Exploring Consumer Retail Shopping

Experience explored the consumer retail shopping experience in modern retail formats. He also

examined the factors that affect the consumer„s shopping experience in the Indian cultural

milieu. The author felt a need for studying motivations and behaviour with respect to actual retail

store attributes as there were significant literature on consumer motivations, expectations and

shopping orientations in the Indian context. The article provided an insight about various factors

influencing consumers in the modern retail context and the preference order for the same.

Though there are a number of studies done to measure the influence of store attributes on

customer satisfaction and store patronage behaviour, this study is an attempt to study the

behavior of the consumer towards organized retail store attributes.

2. METHODOLOGY

The objective of the study is formulated to analyse the most prioritized attributes of organized

formats which attracts the consumers towards organized retailers in Delhi & NCR. The Stratified

random sampling (Two stage sampling) was adapted in the study and the primary data from 250

customers was collected through survey. Percentage analysis, Weighted Average method and

ANOVA are used to interpret the findings. A hypothesis was set to find out the difference in the

opinion of the customers on the organized retail store attributes under different income levels.

3. RESULTS AND DISCUSSIONS

Table 1: Gender of respondents

Gender

Frequency Percent Valid Percent Cumulative Percent

Valid Male 121 48.4 48.4 48.4

Female 129 51.6 51.6 100.0

Total 250 100.0 100.0


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The above table shows that 48.4% of male and 51.6% female respondents, it shows that more

females are making purchasing as compared to men.

Table 2: Age of respondents

Age in years


Vali

d

18-25 24 9.6 9.6 9.6

25-32 113 45.2 45.2 54.8

32-39 88 35.2 35.2 90.0

39-46 22 8.8 8.8 98.8

46 and above 3 1.2 1.2 100.0

Total 250 100.0 100.0

Majority of respondents are in age group of 25-32 (45.2%) years and 32-39 years (35.2%) both

of this age group alone contains around 78% of total respondents. Therefore, it may be

concluded that most of the shoppers are in 25-39 years of age.

Table 3: Disposable Income of respondents

Disposable Income


under 5000 23 9.2 9.2 9.2

5000-10000 101 40.4 40.4 49.6

10000-15000 84 33.6 33.6 83.2

15000-20000 39 15.6 15.6 98.8

20000 and above 3 1.2 1.2 100.0

Total 250 100.0 100.0

Most of the respondents are having disposable income between 5000-15000 (74%).


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Table 4: Nature of jobs of respondents: Nature of job

Frequency Percent

Valid

Percent

Cumulative

Percent

Government

Employee 67 26.8 26.8 26.8

Private sector 163 65.2 65.2 92.0

self Employed 20 8.0 8.0 100.0

Total 250 100.0 100.0

Majority of respondents (65.2%) are in private sector jobs.

Table 5: Frequency of weekly store Visit : Frequency of weekly store visit

Frequency Percent Valid Percent

Cumulative

Percent

once a week 10 4.0 4.0 4.0

twice a week 142 56.8 56.8 60.8

Thrice a week 80 32.0 32.0 92.8

four times a week 13 5.2 5.2 98.0

more than four

times 5 2.0 2.0 100.0

Total 250 100.0 100.0

Majority of respondents are visiting twice (56.8%) and thrice (32%) a week to the stores.

Table 6: Marital status Marital Status


Valid married 170 68.0 68.0 68.0

unmarried 80 32.0 32.0 100.0

Total 250 100.0 100.0

Table 6 shows that 68% of the total respondents are married.


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Table 7: Factors influencing buying decisions in organized retail stores

Factors influencing Buying Decision


Valid Availability of range of

products 66 26.4 26.4 26.4

Reasonable price 51 20.4 20.4 46.8

Displays and signage 26 10.4 10.4 57.2

Personal service 19 7.6 7.6 64.8

Lighting in the store 34 13.6 13.6 78.4

Food court 37 14.8 14.8 93.2

Parking space 17 6.8 6.8 100.0

Total 250 100.0 100.0

The above table shows that the main factors behind the buying decision of customers are

availability of range of products in store and reasonable price (combined 46.8% of respondents),

the other factors which affects the buying decisions hugely are food court (14.8%) and lighting in

the store (13.6%). It indicates that reasonable price gets highest priority next to the availability of

range (variety) of products in the organized shop.

Table 8: Rank assigned to attributes of organized formats

S. NO. PREFERENCE WEIGHTED AVERAGE RANK

1 Quality 4.51 I

2 Choice/Variety 4.27 II

3 Display of Information 3.86 III

4 Convenience 3.83 IV

5 Service 3.72 VI

6 Price 3.36 VII

7 Hygiene 3.76 V

From the above table, we can infer that quality is ranked first based on the weighted average

obtained, Choice/Variety is ranked second , Display of information is ranked third, convenience

is ranked fourth, hygiene is ranked fifth, service is ranked sixth, and price is ranked seventh by


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the customers of organized retailers. It is evident that quality and Variety are given much

importance while making the purchase decision in organized retail outlets.

Extent of variation in the opinion about attributes of organized retail formats

based on the income level of the customers

Ho: There is no significant difference between income of the customers and their perception on

attributes of organized stores.

H1: There is significant difference between income of the customers and their perception on

attributes of organized stores.

Table 9: ANOVA

Sum of Squares df Mean Square F Sig.

Quality Between

Groups 1.068 4 .267 .882 .452

Within Groups 86.532 245 .353

Total 87.600 249

Choice/

Variety

Between

Groups .735 4 .184 2.329 .045

Within Groups

136.981 245 .559

*

Total 137.716 249

Display of

Information

Between

Groups 6.019 4 1.505 4.638 .004

Within Groups 196.365 245 .801 *

Total 202.384 249

Conven

ience

Between

Groups .590 4 .148 .406 .749


Total 172.244 249

Service Between

Groups 3.525 4 .881 1.828 .145



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Total 229.600 249

Price Between

Groups .815 4 .204 .736 .532


Total 62.436 249

Hygiene Between

Groups 1.031 4 .258 .029 .993


Total 78.164 249

* Significant at 5% level

Table 9 shows the difference of opinion on the attributes of organized retailers based on the

income level of the customers. Since the sig value is less than 0.05 for the variables display of

information and the available choice/variety, we reject H0 and accept H1.We may conclude that

the customers under different income categories and their opinion on the display of information

and the available choice/variety, in the organized retail outlets differs significantly. With regard

to the other attributes of the store considered for the study such as quality, convenience, service,

price and hygiene, the sig values are higher than 0.05 the H0 is accepted. It shows that the

customers from different income categories do not differ in their opinion on the preferences of

the attributes other than display and the variety of products offered in the organized retail outlets

where they purchase.

4. CONCLUSION

The customers in Coimbatore prefer organized retailers to unorganized retailers because of the

store attributes such as quality, Convenience, Variety, Consistency, Price, Hygiene etc offered by

the former. Reasonable price gets highest priority next to the availability of range (variety) of

products among the features of the organized retail shop, while the customer purchase from

organized retail outlets. Based on the weighted average of the ranks assigned to the attributes of

the store by the customers, quality is ranked as the most (first) preferred attribute. Income of the

customers had a major influence on their choice of organized retail outlet especially when it

comes to the availability of different varieties of products and display of information in the

organized store.


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